Insurance for contractors
Most contractors carry general liability and tools coverage, and add workers’ comp once they have a crew. Here’s what each one answers on a job, and what a general contractor will want to see before you start.
- Usually starts with
- General liability and tools
- Often asked for by
- General contractors and homeowners
About five minutes. Your certificate is ready the day you buy.
What goes wrong on a job site
What happens most often to contractors, and the policy that answers each one.
- General liability
01
A leak after you leave
A fitting you installed lets go a week later and soaks the client’s floors and the ceiling below. General liability usually covers damage your finished work causes, called completed operations, though not the cost of redoing the fitting itself.
- Workers’ comp
02
A fall from a ladder
Someone on your crew misses a rung carrying drywall and breaks a wrist. Workers’ comp pays for treatment and part of their wages while they’re off the job, as your state’s rules set out.
- Tools and equipment
03
Tools gone from the truck
Someone breaks into the truck overnight and takes the saws, drivers and laser level. Tools and equipment coverage can help pay to replace them, often when there are signs of forced entry.
- General liability
04
Debris hits a neighbor’s car
A gust catches a sheet of roofing and it dents the car parked next door, or a passerby trips over your hose run. General liability can help pay for the damage or injury and your defense.
- Professional liability
05
Plans that don’t hold up
You drew the deck plans, and an inspector later finds the footings undersized, so it has to be rebuilt. If you design or specify work, professional liability can help with claims that your plans cost the client money.
The coverage contractors carry
In the order most owners buy it. Quote them together and see every limit before you pay.
Numbers on the photo match the policies beside it.
- Most carry it01 General liability
It answers damage to clients’ property and injuries to the public, during the job and after you leave. General contractors and homeowners usually ask for it before you start.
$1M / $2M - Most carry it02 Tools and equipment
Your saws, compressors and ladders move between the truck, the site and storage. Property insurance usually stops at your address. This follows the tools.
Up to $50K - Once you hire03 Workers’ comp
Most states require it once you have employees, and general contractors often want proof before you’re on site. Rules vary by state, and sometimes by trade.
Set by state - If it applies04 Professional liability
For design-build work, drawings or specs that clients rely on. General liability doesn’t cover financial losses from mistakes in them.
$1M per claim
Who will ask for proof
Your certificate is ready the day you buy, so you can send it as soon as someone asks.
General contractors
Usually general liability with the GC named as an additional insured, often on a primary and noncontributory basis, plus a waiver of subrogation. Many also want proof of workers’ comp before you start.
Homeowners
Often a certificate showing your general liability limits before work begins, especially on bigger remodels.
Property managers
Usually additional insured status for the owner and the management company, with limits set in the service agreement.
Licensing boards and permit offices
Some states and cities ask for proof of liability insurance or workers’ comp to license a contractor or pull a permit. Requirements vary by location.
What moves your price
There’s no price on this page. Your quote is the real number, in about five minutes.
How much does business insurance cost?- 01Your trade, and whether you work on roofs or at height
- 02Residential, commercial or new construction
- 03Your revenue and payroll
- 04How much work you subcontract, and whether your subs are insured
- 05The value of your tools and where they sleep at night
- 06Your claims history
Keep claims small
Habits that make a claim less likely, and easier to settle when one happens.
Collect certificates from your subs
Get a current certificate from every subcontractor before they start. An uninsured sub can be added to your premium at audit.
Don’t leave the good tools in the truck
Use a locked box bolted to the bed, park somewhere lit, and take the costliest tools inside overnight. Keep serial numbers and photos.
Check ladders and tie off
Inspect ladders before each use, set them at the right angle and use fall protection on roofs.
Put the job in writing
A written scope, signed change orders and a sign-off at the end make it easier to show what you did and when you finished.
Every kind of trade
Choose yours and the quote starts with it filled in.
Guides for contractors
Longer answers to the questions below.
What insurance contractors need to win jobs10 min readDo independent contractors need workers’ comp?9 min readWhat is inland marine insurance?9 min read
Additional insured vs. certificate holder9 min readHandyman insurance: what you need for small jobs8 min readLandscaping business insurance: mowers, crews and flying rocks8 min readPlumber insurance: leaks after you leave and what covers them7 min readHow to collect and check certificates from your subcontractors8 min readQuestions from
contractors
What insurance does a contractor need?
Most contractors start with general liability and tools and equipment coverage. Workers’ comp comes in once you hire, and most states require it. If you design or specify work, professional liability may apply too.
Does general liability pay to fix my own work?
Usually not. It typically covers damage your work causes to other property, like the ceiling under a leaking pipe, but not the cost of redoing the pipe. Check the exclusions in your policy.
Do I need workers’ comp if I work alone?
Often not by law, since many states let owners exclude themselves. But some general contractors won’t let you on site without it. Rules vary by state, so check your state’s workers’ comp agency and your contracts.
Do my subcontractors need their own insurance?
Usually, yes. If a sub has no coverage, their payroll can be added to your premium at audit, and their claims can land on your policy. Ask for a current certificate before they start.
What does “additional insured” mean in a GC’s contract?
It extends your general liability to the GC for claims that arise from your work. Contracts often pair it with primary and noncontributory wording and a waiver of subrogation. Read the insurance section before you sign so your policy matches it.
Are my tools covered on a job site?
With tools and equipment coverage, usually yes: on site, in transit and in storage. Property insurance usually covers only your business address. Check the conditions for tools left in a vehicle overnight.
Do I need insurance to get licensed?
In some states and cities, yes. Licensing boards may ask for proof of general liability, workers’ comp or a bond. Requirements vary, so check with your state or local licensing office.
Have the certificate ready before the GC asks.
Quote General liability, tools and equipment and workers’ comp together, and see every limit before you buy.